In The Dark About Debt?

With one in ten adults in the dark about their debts, here’s why…….

Do you always check your bank statements? Or do they languish, often unopened, on your living room shelf? If questioned, could you name the balances outstanding on your credit cards and loans… Or would you wince and pluck a ‘ballpark’ figure from your memory? If you’re a bit woolly on the exact amounts you owe, you’re far from alone.

According to new research from CreditExpert, only one in four adults are able to accurately state how much they have left to pay on outstanding loans. However, being in the dark about debt is never a safe situation. In fact, it could be the first step on the road to money misery.

Ignorance Is Bliss?

According to CreditExpert’s survey, a seriously worrying one in ten adults admit they have no idea how much debt they’re in.More than a third of people questioned (36%) said they weren’t sure what APR (Annual Percentage Rate) is or how it works, and almost half (48%) were unable to recall the interest rates they’re paying on their credit cards.While it’s easy to dismiss uncertainty as the result of hectic living, I think there’s something more sinister behind these statistics.No matter how busy you are, keeping on top of your finances is vital — or, eventually, you may find that they’re on top of you.The problem with ignoring debts is that, by doing so, you abdicate control over them. It might seem easier in the short term, but ‘denying’ your debts means that they could hit crisis point later.’Ignorance’ of even comparatively small debts might see them plague you for decades. As Cliff D’Arcy recently pointed out, a £2000 debt at 16.5% APR could take you thirty years to clear if you pushed it to the back of your mind, only paying back the minimum required each month.On the other hand, if know how much you owe, you can use money saving tricks such as balance transfers to beat down your debts.

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